Systems Thinking and the Recession

Posted: February 4, 2009 in Thinking

This morning I heard an interview with Robert Reich (former US Secretary of Labor) on one of our local Public Radio stations on the program, Marketplace Morning Report. Mr. Reich notes:

“But what’s intelligent for an individual does not necessarily translate into what’s good for the economy as a whole. The only way to create or preserve jobs is through additional spending. And unlike tax cuts used to pay down personal debt or add to savings, every dollar of government spending flows directly into the economy and adds to overall demand.”

Optimizing your personal financial situation in the short term sub-optimizes our country’s economy in the long term and probably hurts you as an individual in the long term too. We have to think systemically when it comes to repairing our economy and keeping it healthy. Pursuing individual wealth without thinking about the whole is what got us into the condition that we currently face.

Advertisements
Comments
  1. Anonymous says:

    Reich’s quote: “But what’s intelligent for an individual does not necessarily translate into what’s good for the economy as a whole.”I agree. I’m still going to keep my cash liquid and buy into the market when i find solid companies. Reich’s quote: “The only way to create or preserve jobs is through additional spending. “I’m always wary of ultimatums like “only”. The systems thinker answer is “it depends.” There are many ways to create of preserve jobs without additional government spending. Also, where does the revenue come from for additional spending? From small businesses or sole proprietors who will have less mone to create or save jobs? That is illogical. Reich’s Quote: “And unlike tax cuts used to pay down personal debt or add to savings, every dollar of government spending flows directly into the economy and adds to overall demand.”I agree with this…but I don’t like the concept of spending being the answer to saving our economy. My inclination is to let the house of cards collapse. We are going to have to pay the piper eventually anyway. Your quote: “We have to think systemically”yes, we do

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s